Quiksilver has restructured its financing to pay down debts as profits fell at the boardsports business.
Private equity firm Rhône will provide $150 million (£92.8m) to Quiksilver via a 5-year loan. Rhône will also receive detachable warrants giving it the right to buy around 20% of the future outstanding shares at a strike price of $1.86 (£1.15). The shares are currently around $3.62 (£2.24).
Quiksilver has also struck a deal with Bank of America and GE Capital to restructure its existing funding arrangements to a new three-year $200m (£123.4m) facility.
Quiksilver is also in talks with its lenders about restructuring its European debts into a new multi-year facility.
Quiksilver will appoint two new directors to the board, to be designated by Rhône. The group said it would use the loans to pay down existing debts. Quiksilver had long-term debt of $604m (£374.4m) at the end of the quarter.
Quiksilver’s income from continuing operations dived to $4.95m (£3.06m) for the second quarter to the end of April, compared to $38.7m (£24m) for the same period the previous year.
Quiksilver’s net revenue decreased to $494.2m (£306m) from $596.3m (£369.3m) for the period, representing an 8% drop in constant currency. Within that, the group’s European division saw net revenues drop 26% to $210.5m (£130.3m) over the period.
Quiksilver chairman, chief executive and president said: “Our agreement with Rhône not only provides the financial stability necessary to complete our new Americas and European financing efforts, but it also allows us to improve our global business and increase the efficiency of our worldwide operations. We are pleased to have addressed our liquidity concerns so that we can now sharpen our focus on streamlining the business and making great product within our three great brands - Quiksilver, Roxy and D.C.”